Station Casinos trying to win back gamblers, revamps Boarding Pass program

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Red Rock Resort in the western Las Vegas Valley.

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Station Casinos was once a Wall Street darling, enjoying increasing profits by nailing a business plan that relied on local, repeat customers. And then Station’s fortunes collapsed, hit hard as the recession especially pummeled Las Vegas and locals thought twice about how to spend their discretionary money.

Gamblers further griped that Station’s video poker machines were disbursing lower payouts — evidence of corporate cost-cutting.

Station has been trying to get back in good graces with its customers after having emerged this year from Chapter 11, with car giveaways, revamped restaurants and more employees. The newest tactic: a revamped Boarding Pass loyalty program with bigger perks.

The program is expected to cost the company more money in the form of more and better freebies and comes when many local casinos are staying the course with cost-cutting efforts. Although gambling revenue appears to have stabilized after a precipitous fall the last couple of years, business remains depressed, with many local casinos noticeably empty during the day and picking up at night and on weekends.

“You have to invest in the future,” Station Casinos Chief Operating Officer Kevin Kelley said. “It’s a very competitive environment out there, and guests are focused on value every single day. We don’t want to give them any excuses to go elsewhere.”

The new Boarding Pass program will give gamblers of most casino games three points for every dollar spent instead of one point, allowing them to rack up points faster for free meals and other offerings in the company’s 18 casinos. Station also will give gamblers $1 for every 1,000 points — money customers can take home, with no obligation to spend it in the casino. And the company is lowering the gambling threshold to qualify for upper tiers within the loyalty program — a separate perk with additional rewards for bigger gamblers.

Industry experts call it a bold move to win back the business of customers who may have been tempted by better deals elsewhere.

“They looked at the economic landscape, with a lot of casinos reining in what they’re offering, and decided that now is the best time to strike,” said Anthony Curtis, publisher of the Las Vegas Advisor newsletter. “They’re doing things that I’ve always said companies should do in a downturn.”

After a painful restructuring process, Station needs to win over customers who have been disillusioned by efforts to reduce and cheapen offerings in the recession, Curtis said.

“This is an amazing investment. They’re putting their money where their mouth is ... they’re also competing in a tough economy and they need their bedrock customer.”

Marketing efforts have helped grow the company’s revenue and operating income in recent months, executives say. Through March, Station’s promotional expenses rose 9 percent, an increase of $1.6 million, compared with the same period a year ago.

Station has improved its ability to court customers after reducing corporate debt by $4 billion in the bankruptcy process to about $2.2 billion as of June 30.

About two years ago and around the time Station sought bankruptcy protection, executives began an effort to improve the loyalty program, which is Station’s chief marketing tool and one that competes with many others around town. In focus groups last year, customers said they wanted more for their money, Kelley said.

Several months ago, Station executives rolled out freebies and discounts for any and all potential customers, not just local gamblers — from 2-for-1 dinners to free hotel stays. The company lowered prices for casino buffets to at or below cost and restored favorable payouts on video poker machines. Station has hired more than 1,000 employees this year, including at least 500 full-time workers, in an effort to improve customer service.

Also this year, Station took back ownership of casino cafes from chain restaurants and introduced a series of company-owned Italian restaurants with oversized portions and reasonable prices. Casinos commonly outsource restaurants to reduce expenses and risks, although such moves can also remove the casino’s control over quality and service.

Customers preferred the company-owned cafes, and like to know what to expect when returning to the casino for a meal, Station spokeswoman Lori Nelson said.

A major ad campaign called “We Love Locals” kicked off in February, becoming a regular feature on local TV stations and billboards around town.

In another expensive promotion, Station gave away 220 cars in February to gamblers — a return to the old-fashioned marketing tactics for which Station Casinos founder Frank Fertitta Jr. was known.

Station expects to spend even more money advertising its revamped loyalty card, Kelley said. Like the company’s “I Love Locals” ads, Boarding Pass commercials and print ads will feature rank-and-file Station employees. About 3,500 of Station’s 13,000-plus workforce auditioned, “American Idol” style, to appear in the spots, with audition participants winning cash and cars as prizes.

“It’s been great for morale,” Nelson said. “Everyone feels very emotionally invested in wanting to make this a success.”

By helping improve an image tarnished in bankruptcy, the company’s marketing efforts are aimed at employees as much as customers, said Roger Gros, publisher of Global Gaming Business magazine.

“The market is really soft now and with the negative outlook the company has had last few years, I think they’re trying to turn that around,” Gros said. “Employees want to see that kind of commitment.”

Station executives aren’t expecting a profit windfall after spending a “truckload” on marketing efforts, Kelley said.

“We’re bullish on the long term growth of the city and the recovery, but it’s a slow process,” he said. “Where you used to get incremental growth of 7 to 8 percent we’re going to be happy for 1, 2 or 3 percent (gaming) growth over the next few years.”



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Discussion 9 comments

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  1. Sorry, Liz, but Stations did not rely on repeat local business. Stations relied on a plan, with the aquiesence of compliant & perhaps corrupt Nevada regulators at the Gaming Board & Commission, to monopolize the local casino business. The so-called "regulators," charged with looking out for the interest of the public, abdicated their responsibility in order to win favor and perhaps future employment with a greedy Stations management. It did not work all that well as Stations bankruptcy shows because, despite the mindset of Stations and the perhaps corrupt government drones charged with overseeing the company, they underestimated the intelligence of locals. Many of us saw through the charade and, with our money and our feet, voted not to patronize the greedy monolith. All locals should be grateful to Anthony Marnell III & Michael Gaughan for having the good sense and decency to treat us like human beings and not as numbingly meaningless figures on the "botton line." As a charter member in Stations & Fiesta's "loyalty" card programs, I have no love for Stations and their greedy attempt to manipulate the local casino scene. They earned what they deserved: a rebuke by Clark County locals!

  2. Well, anyone who views Station as "greedy" will be missing out on more return on their gambling (and non-gambling) dollars. When was the last time you saw the market leader make such a dramatic improvement in what they offer when they did not have to. Pretty bold move, I'd say.

  3. Stations exemplifies the classic "A day late and a dollar short" adage. Locals got onto their game of greed early on and walked away in droves. Even their "We love locals" campaign failed to bring out the staunch players who went elsewhere. They abandoned their most important asset -- their customer base -- and now are trying to win them back. Sorry, but I think the local market has too good a memory and has found more lucrative playing fields. Stations drove me to Boyd and I seriously doubt they can do anything now to bring me back. Interestingly, the article states "[Stations] restored favorable payouts on video poker machines." So, Stations DOES admit they lowered paybacks during the days of their bankruptcy proceedings. Sorry, Stations; you lost me. Forever. I don't like the way you treat us locals. You may love us, but you treat us like crap.

  4. Stations may have made some mistakes. No one really knows. They did what they thought they had to do to survive. No one posting here has or can run a casino.

    Bottom line is they are trying to do right by people now and with most posters/haters here it still seems to hold true that no good deed will go unpunished.

    Good luck to them with their new program. They employee a lot of great people and have been here much longer then most of the haters. They will be here long after the haters also.

  5. I play video poker and craps as well as a little bit of blackjack and Hold' Em at Red Rock all the time. There are times when I win big on the Double Double Bonus video poker. This year alone, I have hit 4 of a Kind Aces with Kicker for $500 twice, $400 4 of Kind Aces with Queen kicker, numerous $200 4 of a Kind 3s and 4s and five jackpots of $640 playing $1 denomination on the machine. But there are times when I lose a lot there too. I am slightly ahead with my winnings there and I stick with one kind of game.That's how you really win at any casino. I will try the Megabucks once in a blue moon and I never win. The penny slots and the tv show or movie themed slots are the worst odds. I stay away from them. So I can say I am kind of successful with my paybacks there.

    I will give all the readers a hint at what else helps me win there at Red Rock:

    -Don't always insert your players card when you play. If you put in $40-$100 or more, put your players card in. If its just $20, don't bother until you win some hands and you are up to $60.

    -When you cash out a big win, the computer tracks that. So, the next couple of times you are playing, don't insert the players card.

    -What I have discovered with video poker is this: When I put in $20 even to activate free slot play, the payback is nothing 9 out of 10 times. When I put in at least $40 or more, I always hit a 4 of a kind at the very least.

    -Always stick with video poker. Best payouts. If you can afford it, play $1 denominations.

    -Play craps, I always seem to win, especially after losing on video poker.

    This is what has worked for me. It may work for all of you too!

  6. "Play craps, I always seem to win, especially after losing on video poker."

    I love this guy. So that's the trick. Lose at video poker first, then go win at craps. That's where they get the money to build all those nice casinos...(-;

  7. Unfortunately, 1dayatatime, your post could be directed towards any operator in Vegas, especially those on and around the strip. Station is nothing strange or unusual; it's just the way business is done now. Sigh.

    I remember back in the 70s, we used to LOVE going to Palace Station. Their buffet was cheap, 3 or 4 dollars, but it was FABULOUS. Nice and cool and comfortable, tons of fresh food, meats, vegs, pastries, deserts. Of course we'd lose $50 in the slots which more than paid for the meal. But the slots weren't tight and sometimes we'd walk out with a pocketful of silver dollars (remember the thrill of silver dollars clanging down into the tray?). It was just a great, fun place, with a happy, relaxed atmosphere, and sometimes we just stayed there instead of on the strip.

    All gone. Now it's all owned by Wall Streeters, Arabian oil shieks, European banks, whatever, all of whom are utterly, totally clueless. You could take this whole discussion and replace the word "Stations" with any other operator in Vegas. Oh, well... why am I wasting time even posting this. It's the way things are, and now I'm down to just passing through Vegas every 3 or 4 years, if even that often.

  8. When I moved here a dozen years ago, my son was about 6. Someone told me there was an off-strip casino called Boulder Station that had daycare. My son and I were basically "raised" there. And of course we alternated with all the Stations with a KidsQuest. What separated Stations from the rest were the floor people. They all knew you. Always said hello. Now the only way you get to ask an employee a question is to wait on a long players club line. If I wanted to be invisible, I'd gamble on the strip. But the final straw was when I opted out of snail mail spam cluttering my mailbox - which is always 20% off a spa treatment that I'll never use. Knowing I gamble every day ( a lot), I waited on the incredibly long players club line to ask why I never get "Free Play". I was told if I don't receive the spa mailings, I also don't get the free play. Tore up my card and have never been back. Their loss. They need to go back to being "neighborly".

  9. All I have to say is this revamp of the rewards system is a bunch of crap. I had $1000 worth of F&B (300,000+ points) and on Sept 16th it was only worth $600. Is that any way to treat loyal players. They devalued the points I had accrued prior to the change. It seems to me that they should have compensated for this loss. I will not play at Stations again. I will take my money to the M and MGM resorts. At those places I am appreciated and respected.